On January 31, 2006, the balances of the accounts appearing in the ledger of Calloway Company, a furniture wholesaler, are as follows:

a. Prepare a multiple-step income statement for the year ended January 31, 2006.
b. Compare the major advantages and disadvantages of the multiple-step and single-step forms of incomestatements.

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Administrative Expenses Building Capital Stock Cash Cost of Merchandise Sold Dividends Interest Expense Merchandise Inventory Notes Payable 80,000 512,500 100,000 48,500 560,000 25,000 7,500 130,000 25,000 Office Supplies Retained Earnings Salaries Payable Sales Sales Discounts Sales Returns and Allowances Selling Expenses Store Supplies 10,600 528,580 3,220 925,000 20,000 60,000 120,000 7,700